Pound Euro Exchange Rate Edges Lower; Pound NZ Dollar & GBP/EUR Losses Forecast

Modified: Tuesday, 6 May 2014 09:29 BST - Written by James Fuller

STORY LINK Pound Euro Exchange Rate Edges Lower; Pound NZ Dollar & GBP/EUR Losses Forecast

Although there was no business conducted in London during yesterday’s session, that didn’t stop pronounced moves for some of the world’s major currency pairs. The Pound euro exchange rate (GBP/EUR) edged lower yesterday following an announcement from the European Union. Meanwhile, the Pound New Zealand Dollar GBP/NZD exchange rate lost even more ground as sentiment towards the Kiwi improved. The Pound Sterling to Euro exchange rate is trading up +0.1% at 1.21690 GBP/EUR.

The Pound euro exchange rate GBP/EUR tested lower on the day following the publication of an official forecast from the European Commission which upwardly revised its annualised 2014 GDP growth projection for the 26 nation European Union from 1.5% to 1.6%. The news spurred the single currency on, sending the Pound euro exchange rate down from close to the 1.2200 GBP/EUR threshold at the start of the session to as low as 1.2149 during late trading.

The shift Southwards for GBP/EUR, which came on relatively light trading volumes, was given further fuel by the assertion from Portugal’s Prime Minister Passos Coelho that his once debt-addled nation will exit its EU/ECB/IMF funded bailout at the end of next week and will not be needing any emergency safety net from the eurozone’s authorities. The Iberian nation accepted the bailout some three years ago, but its return to normal credit conditions, as evidenced by a successful Portuguese bond auction during recent weeks, provides further evidence that the euroland’s economy is healing.

The Pound euro exchange rate will need to break back below the 1.2000 level in order to signal an end to its uptrend which began during the middle part of last year. Conversely, a break above its existing high of 1.2258 for the pair would re-confirm its forward momentum.

Elsewhere, Sterling lost ground against the Kiwi yesterday, sending the Pound New Zealand Dollar exchange rate down to 1.9426 GBP/NZD late on as investors increased their bets that the Reserve Bank of New Zealand will be the world’s first major central bank to increase interest rates since the dark days of the global credit crisis.

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TAGS: Daily Currency Updates Euro Forecasts Euro Pound Forecasts New Zeal Forecasts